Eschewing consumer culture, Pete Adeney, also known as Mr. Money Mustache, practices an extreme frugality that allowed him to retire at age 30. Avoiding car use, DIYing and investing in stock market index funds are among the tactics he and his fellow F.I.R.E. (Financial Independence Retire Early) devotees espouse. Paul Solman reports from Colorado in this installment of “Making Sense.”

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Judy Woodruff:

Now a look at those who are saving early and living frugally, in order to retire young.

Our economics correspondent, Paul Solman, has the story.

It's part of our weekly series Making Sense, which airs every Thursday.

Paul Solman:

Pete Adeney almost always leaves his Longmont, Colorado, home on two wheels, instead of four. It's a lot cheaper.

For seven years, Pete, AKA Mr. Money Mustache, has been preaching parsimony on his popular blog. And he sure practices what he preaches.

How much do you spend a year?

Pete Adeney:

We don't budget, but it seems to always end up around $25,000 to $27,000 per year for the family of three.

Paul Solman:

Plus health insurance in the low 30s.

Adeney and his followers, known as Mustachians, are key players in the F.I.R.E., or FIRE, movement, Financial Independence Retire Early.

And we do mean early. Adeney and his wife left their engineering jobs in 2005.

Pete Adeney:

So, we were 30 at the time.

Paul Solman:

Mark and Sina Ebersole no longer have to work either.

And how old are you?

Mark Ebersole:

Thirty-seven.

Sina Ebersole:

Thirty-five.

Paul Solman:

Michael and Ellen Robinson, both 38, stopped working full-time two years ago.

Michael Robinson:

I had this concept that saving as much as we could as early as we could would allow compound interest more time to do the work.

Paul Solman:

How do they all do it? Adeney saved 50 to 75 percent of his income over nine years as an engineer.

Pete Adeney:

We just did a little bit less than most people of our income level, and that was enough to save it. The U.S. tradition is to spend pretty much everything we earn. We only have like a 3 percent savings rate. You just don't do that, and you always have a choice.

Paul Solman:

How much did you wind up saving?

Pete Adeney:

Today, it would be about $1.1 million or a little bit less. That was what we decided was enough to live on forever.

Paul Solman:

On his blog, Adeney espouses the so-called 4 percent rule: If you salt away and invest 25 times your annual spending, you can then withdraw 4 percent of your savings each year of retirement. But isn't the market risky?

Pete Adeney:

Put the money in the broad economy through index funds, where you own thousands of companies, very conservative, and it's going to fluctuate just because the stock market fluctuates. But if you're just taking a small amount each year, you don't care at all about that.

Don't spend money on things you don't actually need, he says. And don't drive so much.

Pete Adeney:

That's my biggest winning secret to a wealthy life, is just get out of the car a little bit. Driving is way, way more expensive than what most people think. Most people think about gasoline as the cost of driving. Really, it's about five times higher than that. So pretend gas is $15 a gallon. Then you're starting to get an estimate of how expensive driving really is to you.

Paul Solman:

Due to depreciation, maintenance, insurance.

Adeney saves so much because he's also a do-it-yourselfer. Take his house.

Pete Adeney:

The one that we live in now, I built almost entirely from scratch.

Paul Solman:

So you put in your own plumbing?

Pete Adeney:

Yes.

Paul Solman:

You did your own flooring?

Pete Adeney:

Yes, that's part of a house.

Paul Solman:

You did your own electricity?

Pete Adeney:

I would do my own heart surgery if it was safe.

(LAUGHTER)

Paul Solman:

Last year, Adeney renovated a dilapidated building on Longmont's main street to create a co-working space for fellow Mustachians, and added a tiny house conference room.

Pete Adeney:

It was just $3,000 in materials, partially from Craigslist, and then we get a dedicated office that's year-round, insulated.

This is from the Loft, and you can buy that for closer to $8, instead of buying it for $50.

Paul Solman:

As for the furniture in the home Ellen shares with husband Michael and their two young children?

Ellen Robinson:

Pretty much all hand-me-downs. The couch was a hand-me-down from my grandparents. These pieces of furniture right here were hand-me-downs from when the office that Michael worked in had to downsize. The lamp, a friend from my work gave that to me.

Paul Solman:

The coffee table?

Ellen Robinson:

This is something I bought at a resale shop.

Paul Solman:

By now, it will not surprise you that the family car is also secondhand.

Ellen Robinson:

We bought this 2007 Prius used for $8,000 about four years ago. And it's pushing about 195,000 miles, but it still works just fine for our family.

Paul Solman:

One common feature of the fire movement, credit cards used strategically.

Ellen Robinson:

So, we get 6 percent on groceries if we use this card, so 6 percent back, 3 percent on gas, and 3 percent on department stores.

Paul Solman:

Michael, a former salesman who still enjoys putting in one to two days a week as a consultant, says the family could spend less than the $44,500 they spent last year.

Michael Robinson:

There's some cushion in our budget. We're not down to the bone right now, by any means.

Paul Solman:

Do you feel at all deprived?

Ellen Robinson:

No, I do not feel deprived.

Do you feel deprived?

Michael Robinson:

No, we don't.

Ellen Robinson:

I am not above the temptation. If I walk into the mall, I am just as drawn to all those things as anybody else. But I just have a dialogue in my head about the decision to very intentionally not buy those things, and also just very intentionally not going to the mall.

Paul Solman:

Restaurant visits are rare. Instead, the retired Robinsons spend their ample free time cooking and eating at home with their kids.

But wait a second. Aren't there many Americans who simply don't earn enough to save anything, let alone the amounts Pete Adeney promotes?

Pete Adeney:

I'm sure there are, but I also would say that almost everybody can do better. And the lower your income level, the greater the benefit is of figuring out where your money is going. So the median income is $60,000 or whatever in the U.S. for a household.

And what's the bestselling vehicle? A $30,000-plus F-150 pickup truck. That's the problem. We all scale everything up just a bit more than we can afford.

Paul Solman:

But clearly not everyone can do what Adeney has done. Even in retirement, he has earned enough from his blog that he doesn't need to stick to his $25,000-a-year budget. But he does, because, he argues, cutting consumption isn't just about cost-saving.

Pete Adeney:

I would say it's immoral to drive like a six-wheel diesel pickup truck, compared to riding a bike or just picking the most practical car for whatever your needs are.

Paul Solman:

Immoral because it's polluting the atmosphere?

Pete Adeney:

Yes, it's because of your effect on other people and other living things. So, like, you're going to consume a lot more metal and a lot more fossil fuels just to carry your tiny self around.

Paul Solman:

Adeney does have followers who can't afford to stash away at Mustachian levels.

Michelle Jackson turned out for a pop-up business school held at Mr. Mustache's co-working space to learn how to earn more, so she could save more and retire early-ish.

Michelle Jackson:

There are many people who would like to attain that, but maybe they have to pay off debt first in order to get to the point to invest and focus on those kinds of things.

Paul Solman:

How much do you owe right now?

Michelle Jackson:

The amount that I'm focused on now, minus the students loans, is about $11,000.

Paul Solman:

And even for debt-free higher earners like Mark and Sina Ebersole, becoming financially independent began as a heavy lift.

Sina Ebersole:

It was pretty hard at the beginning for me, paring it down, and saving, saving, saving, saving. That was a very foreign concept for me.

Paul Solman:

Did you like it?

Sina Ebersole:

No. It felt a little bit like, are we wasting away our good years?

Paul Solman:

Ten years later, the former dance instructor is grateful that she and Mark, an engineer, work only when they want to.

Sina Ebersole:

We're working on opening a ballroom dance hall.

Mark Ebersole:

It's kind of like a dance — ballroom dance studio, but more social-focused.

Paul Solman:

Ellen Robinson relishes the reward of scrimping that drives the FIRE men and women seeking financial independence.

Ellen Robinson:

So, it's not necessarily about not working, but it's the freedom that comes with not having to work. Right now, my kids are 4 and 2, and I'm home with them all day everyday, and not worrying about whether or not we can buy our groceries.

Paul Solman:

As for Mr. Money Mustache himself,

Pete Adeney:

The goal is just to live a happy existence and maybe leave the world better than when you started. So I have done small businesses like carpentry, and a lot of dad work has been my biggest occupation, a bit of writing, some music.

So, I still have, if I'm lucky, another 55 years of retirement to go. And I will let you know how that turns out.